Afternoon:
9°c
To Monaco for the day to meet Christian Candy, the younger and slightly quieter of the two brothers who have been making headlines all week by blaming Prince Charles for the breakdown of their joint venture with the Qatari's to build 638 flats on the 12 empty acres that once held Chelsea Barracks.
The visit took place 48 hours before a multi-million-pound claim became available for public inspection. So he was circumspect on the detailed charges levied by his company, CPC, against Qatari Diar, the development arm of the oil-rich state.
But the leaked news that Christian, 35, and his 36-year old brother, Nick, were taking Qatari Diar to court made it possible to ask over lunch why they are suing the Qataris on one project while still working with them on another — the construction of 81 hyper-luxury flats in Knightsbridge, which are 70%-owned by the brothers.
“Because they signed a contract agreeing to pay us once planning permission was granted — and then they caved in to pressure from Prince Charles and didn't even apply,” précis the view of Christian Candy.
The details came out in court on Tuesday, making it easy to see why CPC is suing. Qatari Diar agreed to pay tens of millions to break the development agreement on the £3 billion project because the Richard Rogers design faced local opposition and hostility from Prince Charles.
CPC was paid exactly £37,917,806 in April to give up its share of the joint venture. An additional success fee of up to £81 million was agreed for whatever scheme is granted permission. Or, if the Qataris felt inclined, they could pay CPC £68.5 million to just go away.
The judge is due to rule on Monday if the case can be tried speedily. But if the Qataris are feeling spiteful, they could, as rumoured, simply apply for permission for the Rogers scheme, knowing it will be turned down. That will delay payment to the Candy's until any new design gets approval.
That would please detractors of the brothers, who accumulate enemies. A $500 million (£300 million) development in California they put together has collapsed, leaving one party chasing them in the US courts. There was the aborted NoHo development north of Oxford Street, which fell apart leaving the bust Icelandic Bank Kaupthing with a £200 million bill.
Then there is the envy. A Rolls-Royce picks you up at Nice Airport and drops you at a 30-room flat atop an office block in Monaco, once owned by financier Edmund Safra. He died there in a mysterious fire 10 years ago. The brothers bought it. Christian says they have spent 29 million (£26 million) doing the place up. A shoeless tour confirms this may well be the case.
Having His and His yachts doesn't help — especially as the latest one is 200 feet long. A newish jet fitted out in Candy and Candy livery just rubs in the success of two Epsom College boys who have come from nowhere in a decade. But the trappings of success are clearly designed to promote Brand Candy — if you have limitless money we can provide limitless style.
So have the brothers got limitless money? No. But their present, estimated worth of £330 million may get a boost if they can prove at last that those who do have limitless money will pay limitless amounts for new flats in sizeable developments.
At Knightsbridge, half the 81 apartments have been sold. Nick has said these sales will cover the £700 million-£800 million cost of the development. The other half go on sale early next year, so it will be all profit once they sell. That could take a year or so. But, one day, the Qataris may eventually get back the cost of removing the Candys from Chelsea Barracks from their 30% stake in Knightsbridge.
Shard's set to soar and its little brother will make big profits
The governor of the central bank of Qatar turned up at The Shard development adjacent to London Bridge station on Wednesday.
The visit by Sheikh Abdullah Bin Saud Al-Thani did feel a little like a diversionary tactic, designed to draw attention away from the rumpus at Chelsea Barracks. But the purpose of the visit was to settle lingering doubts. “The state of Qatar is firmly behind this project,” said the man who promised £800 million 12 months ago to allow the tallest tower in Europe to be built.
Since then a very big hole in the ground has been dug and filled with concrete. Now the steel frame of the 1000-foot high skyscraper, designed by Italian architect Renzo Piano, is beginning to peep above the skyline. The 80-storey tower will continue its climb to the sky, reaching full height in 12 months' time, and completing by May 2012.
It very nearly didn't happen. Developer Irvine Sellar had run out of money and partners by late 2007 after eight years of trying. In early 2008, after months of negotiation, the 69-year old former Carnaby Street retailer signed a deal handing over 80% of the equity to a consortium of Qatari banks.
A very pleased Sellar stood up just before the Sheikh. “I am very grateful to the State of Qatar. We are now in full construction mode. You will see the Shard any time soon from all over London.” Sellar will be even more pleased, because the Qataris have quietly sanctioned work to begin on the baby shard.
This is a nearby 17-storey block of some 600,000 sq ft where really big money can be made. The Shard will cost a fortune to build; its baby brother, far less. Yet both have much the same amount of office space to let, presumably at much the same price. No wonder Irvine Sellar has just treated himself to a nice new Rolls-Royce.
Schroders chief is predicting a VW drive to recovery
This week came news that investors are putting more cash into commercial property funds than they are taking out — the first time this has happened since the spring of 2007.
So, here is advice from a couple of experts.
On Wednesday, Schroders head of property William Hill said the sector faced a VW-shaped recovery. Real estate prices that crashed in 2007-8 will be up 18% by next year before falling 2% in 2011 — the V. They will then bump along in a series of Ws created by Dubai-style aftershocks.
Meanwhile, beware. “There is a danger that the money coming in will drive prices too high,” he said.
It's a view shared by Justin O'Connor, chief executive of Cordea Savills. “There is a relative scarcity of assets which has led to talk of a property bubble,” he says.
But a pin is at hand adds O'Connor, who aims to double spending to £200 million in 2010.
“There is likely to be more property on the market next year as prices become attractive
to sellers.”
Hill agrees with this — but for a completely different reason: “There is a big, black cloud of debt hanging over the market and there will be plenty of supply from banks encouraging their borrowers to sell.”
Every cloud…
